Medicare has coverage gaps despite congressional effort to expand it
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If Democratic lawmakers get their way, Medicare will start covering hearing services for the first time in the program’s history.
The coverage, which would take effect in 2023, is included in Democrats’ proposed $1.85 trillion spending bill, dubbed the Build Back Better Act and aimed partly at strengthening the social safety net. The legislative package still needs approval in both the House and Senate before it could be signed into law by President Joe Biden.
However, hearing is not the only coverage gap. In addition to many new enrollees finding out that Medicare is not free — far from it — they also may be surprised that it doesn’t cover a variety of health-care expenses that can hit retirees pretty hard.
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About 63.3 million people are enrolled in Medicare. Most of them are age 65 or older (55.1 million) and the rest are generally younger with permanent disabilities.
Some people with low incomes qualify for programs that reduce their Medicare-related costs. There’s extra help for prescription drug coverage, and some state-run savings programs can help with copays, coinsurance, deductibles and premiums.
For those who don’t qualify, paying out of pocket for uncovered services or buying additional insurance are their options.
Here’s what to know.
First, the ABCs (and D) of Medicare
Basic, or original, Medicare consists of Part A and Part B. You’re expected to sign up when you reach age 65 unless you have qualifying health insurance elsewhere (i.e., through an employer).
Part A provides coverage for hospital stays, skilled nursing, hospice and some home health services. As long as you have at least a 10-year work history of paying into the system, you pay no premium for Part A. However, it comes with a deductible ($1,484 this year and an estimated $1,556 in 2022) per benefit period and has caps on benefits.
“One surprise is that the Part A deductible is not a calendar-year deductible but a per-benefit-period deductible, which means you may have to pay it more than once if there’s 60 or more days in between inpatient stays,” said Danielle Roberts, co-founder of insurance firm Boomer Benefits.
Part B coverage kicks in when you visit a doctor or receive other outpatient services, like a flu shot. It also covers medical equipment, like crutches or blood-sugar monitors.
This year the standard monthly premium for Part B is $148.50, and is forecast to rise to $158.50 in 2022. (However, higher-income beneficiaries pay more.) It also comes with a $203 deductible this year (estimated to be $217 in 2022). After it’s met, you typically pay 20% of covered services.
Basic Medicare does not cover prescription drugs. You can get this coverage through Part D, either as a standalone plan with its own premium or through a Medicare Advantage Plan (Part C), which also may have a premium beyond what you pay for Part B.
If you go with an Advantage Plan, your Parts A and B coverage also would be delivered via the private insurance company offering the plan.
Also be aware that there is no cap on out-of-pocket spending for basic Medicare. Nor is there one for Part D prescription drug coverage, although the Democrats’ spending bill would limit it to $2,000 yearly.
Teeth, eyes and ears
While the Democrats’ spending plan would add hearing care to Medicare, dental work and routine vision would remain uncovered despite earlier versions of the bill including it.
This means basic Medicare does not cover dentures, which can run anywhere from about $1,000 to north of $5,000 for a complete set. And while a routine cleaning and X-ray could set you back about $200 and a filling runs about $150 or $200, a single tooth implant can be upward of $4,000.
However, if a dental condition involves an emergency or complicated procedure, it could be covered.
Same goes for routine vision checks. If you need glasses, it’s generally not covered. Yet if you have an eye condition like glaucoma or cataracts, basic Medicare will cover your care.
If you decide to go with an Advantage Plan, there’s a good chance dental, hearing and vision will be included, although coverage may not be comprehensive.
You also can purchase a separate policy that gives you more extensive coverage.
Standalone vision plans can cost about $10 to $30 monthly depending on how extensive the coverage is, and dental plans could run somewhere in the neighborhood of $30 to $50 a month.
For the jet-setters
If your later-in-life plans include hopping from country to country, be aware that basic Medicare generally does not cover care you receive outside the U.S.
If you choose an Advantage Plan, emergencies are often covered worldwide. However, routine care received overseas may not be.
In this situation, you can look into travel-medical policies specifically targeted at the 65-and-over crowd. Depending on the specifics of the coverage and your age, these policies can cost about $175 or more a month.
Meanwhile, if you choose to stick with just basic Medicare instead of enrolling in an Advantage Plan, you have the option of purchasing a so-called Medigap policy that includes coverage while traveling. (You cannot purchase Medigap if you have an Advantage Plan.)
In general, Medigap plans cover the cost of some deductibles or coinsurance associated with basic Medicare. Some of them also offer coverage during overseas travel, with a cap of $50,000.
You also can purchase a standalone plan in addition to Medigap if you anticipate that cap being too low.
While not all older people will need long-term care — which generally means help with daily living activities like bathing and dressing — those who do won’t get much coverage from Medicare.
Beneficiaries “are very surprised by the lack of long-term care coverage,” Roberts said. “Although Medicare can cover your medical needs inside a nursing home or facility, it would not cover the cost of room and board and custodial care.”
There are insurance policies that cover long-term care, although they can be pricey. And the older you are, the more they cost.
For instance, rates for a couple, both age 55, would be about $2,080 for a yearly policy that offers $165,000 in coverage to each policy holder, according to the American Association for Long-Term Care Insurance. If they are age 65, that amount is about $3,750.
Qualifying for skilled nursing coverage
If you end up in the hospital, make sure you know whether you have been admitted or are there for observation. It can make a big difference in whether Medicare pays if your after-care involves skilled nursing. This could include, say, physical therapy, after a fall.
“This is a big one,” said Elizabeth Gavino, founder of Lewin & Gavino and an independent broker and general agent for Medicare plans.
“The qualification is spending three days as an inpatient to qualify for skilled nursing care,” Gavino said. “Time spent in the hospital under observation is not counted.”
Such skilled nursing care is covered through Medicare Part A if you qualify. For the first 20 days, Medicare pays the full cost of covered services, according to the Centers for Medicare & Medicaid Services. For days 21 to 100, you pay coinsurance. For days beyond 100, you pay the full cost of the care.
Odds and ends
Basic Medicare also does not cover acupuncture, cosmetic surgery or routine foot care.
Additionally, many beneficiaries are surprised to discover that a standard annual physical is not covered by Medicare — at least the kind they were likely accustomed to under previous insurance, Roberts said.
“Medicare does have a ‘welcome to Medicare’ visit and an annual wellness visit that are similar to a physical, but not nearly as comprehensive,” Roberts said.